Monday, February 16, 2015

Why there cannot be a peaceful transition

The reason there cannot be a peaceful transition you can find it in the most recent and devastating moment for the upper chavismo: the flight of Leamsy Salazar to the US and his rattling about Diosdado Cabello as a capo de drug mafia. "Cartel de los Soles" they call it, for the "suns" that mark the Venezuelan generals' uniforms.

Before I continue, the dictatorial nature of the regime is fully acknowledged in the foreign press as the word "defection" is used instead of, say, escape, surrender, exile.... Cold war memories....

In practical terms this means that people like Cabello are now on their way to get a free plane ticket to The Hague. Next year. In ten, it does not matter. Even fool proof transitions eventually failed. Ask Pinochet in Chile, Videla in Argentina. No matter what amnesty arrangement may be reached, a victim will always be able to have at some point this one overturned in some international court, perhaps even forcing Venezuelan courts to send Cabello (and many others) on trial. This is not the XX century anymore, Toto!

Thus, I speculate, at least a couple of hundreds of chavistas have realized once and for all this month that they are in trouble. They have now no other choice but to find a way to stay in Venezuela, power firmly in hand. They have no other choice even if the opposition were to offer them a "deal". Such deal would last only for a while, as times changes, as the victims become stronger in a post chavismo Venezuela, as the signatories of that deal retire or are voted out of office.

This, more than anything else explains the sudden shift into a repression gear that we have experienced these past two weeks. But more on that later.

What observers need to understand is that out of their sheer arrogance, their idiotic belief on the eternity of Chavez, their belief that oil would keep going up and up, a bunch of chavistas never thought about stopping while they were ahead. Now they are cornered and the stupidity that drove them there must make them even angrier, even more dangerous.

17 comments:

Daniel, please be careful and think about abandoning ship. In the future you and everyone of your ilk and abilities will be desperately needed to rebuild from this train wreck. Please keep your head down.Caracas Canadian

I took a class long ago on the Game Theory of Authoritarianism. When authoritarian regimes faces existential threats, be they real or merely perceived (or sometimes created) by the principal actors, these actors will face a day of reckoning in which they face a stark choice: to allow the regime to fall or to maintain themselves in power at all cost. Unless the actors can secure for themselves an exit that guarantees their safety, then the likely outcome is a downward spiral of increasing repression. For example, the Duvalier regime fell, allowed itself to fall, because the Duvaliers secured exile in France. The Pinochet regime allowed itself to be replaced by a limited democratic government by negotiating immunity for military. The Korean military regime of the 1980s also opted for devolution. Cuba appears to be on this path albeit more modest but then China seemed to be headed on devolutionary course when Tiananmen Square became a bridge too far for the CCP. I don't believe that these paths of exile, immunity or gradual devolution are open to Diosdado Cabello & et al. The regime is stuck in its Jacobin phase and Thermidor unlikely to come. The probable outcome is an ever increasing repressive state. This too has risks for the regime. It risks being ostracized, isolated and debilitated externally through the use of sanctions. Venezuela may have unflinching allies in ALBA and thus find some support wherein but the rest of Latin America isn't going to tolerate the rise of a Stalinist police state especially one that defaults on its external obligations. Part of the reason that Colombia opted for its closing line (“Esperamos que Leopoldo López recupere su libertad lo antes posible”) in its recent circular to the Maduro government protesting the treatment of former President Andrés Pastrana is that with Colombian-Venezuelan trade in a free fall (Colombian textile exports, to cite one example, fell from $1 billion USD in 2013 to $70 million in 2014) Colombia no longer has as many commercial interests to protect. The collapse of economic trade relations thus opens the possibility of a more forthright political expression. Venezuela owes Brazil over $4 billion USD. How this plays out will impact Brazilian ability to criticize the Venezuela regime. Fail to pay this sum and the wrath of Brazil will be felt.

The crisis in Venezuela is too far gone for any peaceful transition. What remains to be seen is what the reaction of Venezuelans is. Will they acquiesce or will they rebel? My best guess is the former.

What I see and hear from family and friends: " Dios Proveera" , celebrating Carnival time ,looking only at the positive side of things( Denial) , adapting and rationalization, being happy with what they have and making do( tolerating the intolerable). taking advantage of the good things, and of what you can squeeze out of the government, etc etc..

"what you can squeeze out of the government". This is Venezuelans problems and not just under chavismo but for the entirety of their history at least since the discovery of oil in the 1920s. I remember when I was working on my PhD I had one close Venezuelan friend also getting her PhD had another Venezuela friend come visit. He was studying Petroleum Engineering in Texas but all he could talk about was going back to San Cristobal to open a pizzeria. Why study engineering if you want to run a pizza business I asked him. Oh because the government paid for it. A free ride which in education is a good thing. It's a public good though in this case it was more a chance to spend four years abroad on the government dime. It got worse after he left. My friend then told me about the "quince". In Venezuela one could get a government backed loan by paying the banker 15 percent of the sum. This is corruption. I have no idea if the loan was ever repaid but there was no real obligation to pay it back.

I have empathy for Venezuela but frankly this mess is a long time in the making. It predates chavismo though no doubt it has been exacerbated by the politics of chavismo. Venezuela is to its core a kleptocracy and where once it was the elite, it is now those tied to the PSUV who rob the country blind.

As bad is the economic indicators are for Venezuela, one remains relatively good, the unemployment rate. While the share of the workforce in the in the informal sector has gone up recently, the actual unemployment rate remains low at ~5.5%. The temptation is to say the number if "fake" but has certainly bounced up and down in the Chavez-Maduro era which suggests it's no more fake than it was 15 years ago. Another possibility is the current rate is accurate but with salaries declining in real value, people remain in jobs with reduced pay. Perhaps the regime assumes the discontent can be contained as long as people are showing up to work every day, even if it is a "do-nothing" job. The question is how long does the unemployment rate remain low and what happens if it starts rising?

"Why there cannot be peaceful transition" is most likely an accurate summation of the situation. What makes this even more painful is that the guns are in the hands of the government and its paramilitary units.

Francisco Rodriguez has a realistic take on this. He says V has enough assets to liquidate and pay essential bills for the next 2 years until oil prices recover to a sustainable level. I believe that price would be in the 70s (WTI) in around 2 years in fact. The election of an opposition Legislative Assembly will create a gridlock between the Executive, the Supreme Court and the Assembly. Chavistas will benefit because they will blame the gridlock on the opposition. If the opposition tries to pack the Supreme Court with opposition judges, the army will put a padlock on the gate to the Supreme court. And then the Army can save the people with a Self-Coup to ease the gridlock. Things might get preety repressive at that point. But then oil prices are expected to go back to sustainable levels within two years and when that happens, the gvt. will appease the masses with goodies and ease the repression too.

The sealed narcotics indictment can be a very powerful tool in the right hands and under the right circumstances. Unfortunately we are far from there. Keep in mind there is precedent for the sealed indictment remaining sealed: Castro bros. and Aristede. I don't see Cabello bros. indictments being unsealed. How do you follow that up? Once you unseal, you have to go after the guy.

Lo q paso en Aruba fue una cagada. El gobierno americano tapo la vaina bajo el pretexto de "law enforcement matter." The decision to capture the chicken was made at the highest level: Holder, Rice, and POTUS. The secretary of state should have also been in the loop. This group did not know what they where doing and failed to plan for all contingencies. They also failed to understand that this was akin to an act of war. When you take into account the dependance and ownership of those islands by Venezuela(ns), you start to realize the magnitude of the problem. Failure of planning and leadership and it was swept under the rug. They won't go near Venezuela again... this is for the next administration. The DEA should feel used. All that hard work for nothing.

Obama no va a meter mano en Venezuela. Las negociaciones con Cuba son historicas y no incluyen a Venezuela. The US administration's Venezuela-Cuba disconnect is there but it's not lost on Havana which ties it's future and fortunes to Venezuela. The Cuba opening is one "highlight" of Obama's foreign policy that they can spin to their benefit and is defensible. It's pretty clear they're kowtowing to Havana in a bid to cinch deals. I do support this intiative and disagree that the previous path would have seen Havana at its economic knees. The ball is now in Havana's court. The next president (Bush) will then have two years of data to review and adjust. Bush will not be as easy as Obama with Cuba. Bush will want to see results and something in return. Regarding Venezuela, Bush will publicly ignore just like his brother but USGov will observe and remain informed.

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